Skip to main content

Full text of "An American Experiment in Anarcho-Capitalism - The NOT So Wild West"

See other formats

An American Experiment in Anarcho- 
Capitalism: The Not So Wild, Wild West* 


Terry L. Anderson 


P. J. Hill 

Department of Economics, Montana State University 

The growth of government during this century has attracted the attention of 
many scholars interested in explaining that growth and in proposing ways to 
limit it. As a result of this attention, the public choice literature has experi- 
enced an upsurge in the interest in anarchy and its implications for social 
organization. The work of Rawls and Nozick, two volumes edited by 
Gordon Tullock, Explorations in the Theory of Anarchy, and a book by 
David Friedman, The Machinery of Freedom, provide examples. The goals 
of the literature have varied from providing a conceptual framework for 
comparing Leviathan and its opposite extreme to presenting a formula for 
the operation of society in a state of anarchy. But nearly all of this work has 
one common aspect; it explores the "theory of anarchy." The purpose of this 
paper is to take us from the theoretical world of anarchy to a case study of its 
application. To accomplish our task we will first discuss what is meant by 
"anarcho-capitalism" and present several hypotheses relating to the nature 
of social organization in this world. These hypotheses will then be tested in 
the context of the American West during its earliest settlement. We propose 
to examine property rights formulation and protection under voluntary 
organizations such as private protection agencies, vigilantes, wagon trains, 
and early mining camps. Although the early West was not completely 
anarchistic, we believe that government as a legitimate agency of coercion 
was absent for a long enough period to provide insights into the operation 
and viability of property rights in the absence of a formal state. The nature 
of contracts for the provision of "public goods" and the evolution of western 
"laws" for the period from 1830 to 1900 will provide the data for this case 

* This paper was written while Terry Anderson was a National Fellow at the Hoover 
Institution, 1977-78. While retaining responsibility for any errors, the authors wish to 
thank Jon Christianson, Murray Rothbard, and Gordon Tullock for their valuable com- 


The West during this time often is perceived as a place of great chaos, with 
little respect for property or life. Our research indicates that this was not the 
case; property rights were protected and civil order prevailed. Private 
agencies provided the necessary basis for an orderly society in which prop- 
erty was protected and conflicts were resolved. These agencies often did not 
qualify as governments because they did not have a legal monopoly on 
"keeping order." They soon discovered that "warfare" was a costly way of 
resolving disputes and lower cost methods of settlement (arbitration, courts, 
etc.) resulted. In summary, this paper argues that a characterization of the 
American West as chaotic would appear to be incorrect. 

Anarchy: Order or Chaos? 

Though the first dictionary definition of anarchy is "the state of having no 
government," many people believe that the third definition, "confusion or 
chaos generally," is more appropriate since it is a necessary result of the first. 
If we were to engage seriously in the task of dismantling the government as it 
exists in the U.S., the political economist would find no scarcity of programs 
to eliminate. However, as the dismantling continued, the decisions would 
become more and more difficult, with the last "public goods" to be dealt with 
probably being programs designed to define and enforce property rights. 
Consider the following two categories of responses to this problem: 

1) The first school we shall represent as the "constitutionalist" or "social 
contractarian" school. For this group the important question is "how do 
rights re-emerge and come to command respect? How do 'laws' emerge that 
carry with them general respect for their 'legitimacy'?" 1 This position does 
not allow us to "'jump over' the whole set of issues involved in defining the 
rights of persons in the first place." 2 Here collective action is taken as a 
necessary step in the establishment of a social contract or constitutional 
contract which specifies these rights. To the extent that rights could be 
perfectly defined, the only role for the state would be in the protection of 
those rights since the law designed for that protection is the only public 
good. If rights cannot be perfectly well defined, a productive role for the 
state will arise. The greater the degree to which private rights cannot be 
perfectly defined, the more the collective action will be plunged into the 
"eternal dilemma of democratic government," which is "how can govern- 
ment, itself the reflection of interests, establish the legitimate boundaries of 
self-interest, and how can it, conversely carve out those areas of intervention 
that will be socially protective and collectively useful?" 3 The contractarian 
solution to this dilemma is the establishment of a rule of higher law or a 
constitution which specifies the protective and productive roles of the 
government. Since the productive role, because of the free rider problem, 


necessarily requires coercion, the government will be given a monopoly on 
the use of force. Were this not the case, some individuals would choose not 
to pay for services from which they derive benefits. 

2) The second school can be labeled "anarcho-capitalist" or "private 
property anarchist." In its extreme form this school would advocate elimi- 
nating all forms of collective action since all functions of government can be 
replaced by individuals possessing private rights exchangeable in the market 
place. Under this system all transactions would be voluntary except insofar 
as the protection of individual rights and enforcement of contracts required 
coercion. The essential question facing this school is how can law and order, 
which do require some coercion, be supplied without ultimately resulting in 
one provider of those services holding a monopoly on coercion, i.e., govern- 
ment. If a dominant protective firm or association emerges after exchanges 
take place, we will have the minimal state as defined by Nozick and will have 
lapsed back into the world of the "constitutionalist." The private property 
anarchist's view that markets can provide protection services is summarized 
as follows: 

The profit motive will then see to it that the most efficient providers of 
high quality arbitration rise to the top and that inefficient and graft- 
oriented police lose their jobs. In short, the market is capable of provid- 
ing justice at the cheapest price. According to Rothbard, to claim that 
these services are "public goods" and cannot be sold to individuals in 
varying amounts is to make a claim which actually has little basis in 
fact. 4 

Hence, the anarcho-capitalists place faith in the profit seeking entrepreneurs 
to find the optimal size and type of protective services and faith in competi- 
tion to prevent the establishment of a monopoly in the provision of these 

There are essentially two differences between the two schools discussed 
above. First, there is the empirical question of whether competition can 
actually provide the protection services. On the anarcho-capitalist side, there 
is the belief that it can. On the constitutionalists or "minimal state" side, 
there is the following argument. 

Conflicts may occur, and one agency will win. Persons who have previ- 
ously been clients of losing agencies will desert and commence purcha- 
sing their protection from winning agencies. In this manner a single 
protective agency or association will eventually come to dominate the 
market for policing services over a territory. Independent persons who 
refuse to purchase protection from anyone may remain outside the scope 
of the dominant agency, but such independents cannot be allowed to 
punish clients of the agency on their own. They must be coerced into not 
punishing. In order to legitimize their coercion, these persons must be 
compensated, but only to the extent that their deprivation warrants. 5 


The second issue is more conceptual than empirical, and hence, cannot be 
entirely resolved through observation. This issue centers on the question of 
how rights are determined in the first place; how do we get a starting point 
with all its status quo characteristics from which the game can be played. 
Buchanan, a leading constitutionalist, criticizes Friedman and Rothbard, 
two leading private property anarchists, because "they simply 'jump over' 
the whole set of issues involved in defining the rights of persons in the first 
place." 6 To the constitutionalist the Lockean concept of mixing labor with 
resources to arrive at "natural rights" is not sufficient. The contractarian 
approach suggests that the starting point is determined by the initial bar- 
gaining process which results in the constitutional contract. Debate over this 
issue will undoubtedly continue, but even Buchanan agrees that "if the 
distribution or imputation of the rights of persons (rights to do things, both 
with respect to other persons and to physical things) is settled, then away we 
go. And aside from differences on certain specifics (which may be important 
but relatively amenable to analysis, e.g., the efficacy of market-like arrange- 
ments for internal and external peace-keeping), I should accept many of the 
detailed reforms that these passionate advocates propose." 7 

Our purpose in this paper is to discuss, in a historical context, some of the 
important issues that Buchanan says are amenable to analysis. We do not 
plan to debate the issue of the starting point, but will be looking at the 
"efficacy of market-like arrangements for internal . . . peacekeeping," 8 It 
does seem, for the time period and the geographical area which we are 
examining, that there was a distribution of rights which was accepted either 
because of general agreement to some basic precepts of natural law or 
because the inhabitants of the American West came out of a society in which 
certain rights were defined and enforced. Such a starting point is referred to 
as a Schilling point, a point of commonality that exists in the minds of the 
participants in some social situation. 9 Even in the absence of any enforce- 
ment mechanism, most members of the western society agreed that certain 
rights to use and control property existed. Thus when a miner argued that a 
placer claim was his because he "was there first," that claim carried more 
weight than if he claimed it simply because he was most powerful. Tastes, 
culture, ethics, and numerous other influences give Schelling point charac- 
teristics to some claims but not to others. The long period of conflicts 
between the Indians and the settlers can be attributed to a lack of any such 
Schelling points. We concentrate, however, on arrangements for peace- 
keeping and enforcement that existed among the non-indigenous, white 

In the following pages we describe the private enforcement of rights in the 
West between the period of 1830 and 1900. This description does allow one 
to test, in a limited fashion, some of the hypotheses put forth about how 


anarcho-capitalism might function. We qualify the test with "limited" be- 
cause a necessary feature of such a system is the absence of a monopoly on 
coercion. 10 Various coercive agencies would exist but none would have a 
legitimized monopoly on the use of such coercion. The difficulty of dealing 
with this proposition in the American West is obvious. Although for much 
of the period formal government agencies for the protection of rights were 
not present, such agencies were always lurking in the background. There- 
fore, none of the private enforcement means operated entirely independent 
of government influence. Also, one has to be careful in always describing 
private agencies as "non-government" because, to the extent that they 
develop and become the agency of legitimized coercion they also qualify as 
"government." Although numerous descriptions of such private agencies 
exist, it is often times difficult to determine when they are enhancing 
competition and when they are reducing it. 

Despite the above caveats, the West is a useful testing ground for several 
of the specific hypotheses about how anarcho-capitalism might work. We 
use David Friedman's The Machinery of Freedom as our basis for the 
formulation of hypotheses about the working of anarcho-capitalism because 
it is decidedly non-utopian and it does set out, in a fairly specific form, the 
actual mechanisms under which a system of non-government protective 
agencies would operate. The major propositions are: 

1) Anarcho-capitalism is not chaos. Property rights will be protected and civil 
order will prevail. 

2) Private agencies will provide the necessary functions for preservation of an 
orderly society. 

3) Private protection agencies will soon discover that "warfare" is a costly way of 
resolving disputes and lower-cost methods of settlement (arbitration, courts, etc.) 
will result. 

4) The concept of "justice" is not an immutable one that only needs to be discovered. 
Preferences do vary across individuals as to the rules they prefer to live under and the 
price they are willing to pay for such rules. Therefore, significant differences in rules 
might exist in various societies under anarcho-capitalism. 

5) There are not significant enough economies of scale in crime so that major 
"mafia" organizations evolve and dominate society. 

6) Competition among protective agencies and adjudication bodies will serve as 
healthy checks on undesirable behavior. Consumers have better information than 
under government and will use it in judging these agencies. 

Cases from the West 

Before turning to specific examples of anarcho-capitalistic institutions in 
the American West, it is useful to examine the legendary characterization of 
the "wild, wild West." The potential for chaos is a major objection to trust in 
the market for enforcement of rights and many histories of the West seem to 


substantiate this argument. These histories describe the era and area as 
characterized by gunfights, horse-thievery, and general disrespect for basic 
human rights. The taste for the dramatic in literature and other entertain- 
ment forms has led to concentration on the seeming disparity between the 
westerners' desire for order and the prevailing disorder. If the Hollywood 
image of the West were not enough to taint our view, scholars of violence 
contributed with quotes such as the following: "We can report with some 
assurance that compared to frontier days there has been a significant dec- 
rease in crimes of violence in the United States." 11 

Recently, however, more careful examinations of the conditions that 
existed cause one to doubt the accuracy of this perception. In his book, 
Frontier Violence: Another Look, W. Eugene Hollon stated that the be- 
lieved "that the Western frontier was a far more civilized, more peaceful, and 
safer place than American society is today." 12 The legend of the "wild, wild 
West" lives on despite Robert Dykstra's finding that in five of the major 
cattle towns (Abilene, Ellsworth, Wichita, Dodge City, and Caldwell) for the 
years from 1870 to 1885, only 45 homicides were reported — an average of 1.5 
per cattle-trading season. 13 In Abilene, supposedly one of the wildest of the 
cow towns, "nobody was killed in 1869 or 1870. In fact, nobody was killed 
until the advent of officers of the law, employed to prevent killings." 14 Only 
two towns, Ellsworth in 1873 and Dodge City in 1876, ever had five killings 
in any one year. 15 Frank Prassel states in his book subtitled "A Legacy of 
Law and Order," that "if any conclusion can be drawn from recent crime 
statistics, it must be that this last frontier left no significant heritage of 
offenses against the person, relative to other sections of the country." 16 
Moreover, even if crime rates were higher, it should be remembered that the 
preference for order can differ across time and people. To show that the 
West was more "lawless" than our present day society tells one very little 
unless some measure of the "demand for law and order" is available. "While 
the frontier society may appear to have functioned with many violations of 
formal law, it sometimes more truly reflected community customs in conflict 
with superficial and at times alien standards." 17 The vigilance committees 
which sprang up in many of the mining towns of the West provide excellent 
examples of this conflict. In most instances these committees arose after civil 
government was organized. They proved that competition was useful in 
cases where government was ineffective, as in the case of San Francisco in 
the 1850's, 18 or where government became the province of criminals who 
used the legal monopoly on coercion to further their own ends, as in Virginia 
City, Montana Territory in the 1860's. 19 Even in these cases, however, 
violence was not the standard modus operandi. When the San Francisco 
vigilante committee was reconstituted in 1856, "the group remained in action 
for three months, swelling its membership to more than eight thousand. 


During this period, San Francisco had only two murders, compared with 
more than a hundred in the six months before the committee was formed." 20 
To understand how law and order were provided in the American West, 
we now turn to four examples of institutions which approximated anarcho- 
capitalism. These case studies of land claims clubs, cattlemens' associations, 
mining camps, and wagon trains provide support for the hypotheses pre- 
sented above and suggest that private rights were enforced and that chaos 
did not reign. 

a. Land Clubs: 

For the pioneer settlers who often moved into the public domain before it 
was surveyed or open for sale by the federal government, definition and 
enforcement of property rights in the land they claimed was always a 
problem, "These marginal or frontier settlers (squatters as they were called) 
were beyond the pale of constitutional government. No statute of Congress 
protected them in their rights to the claims they had chosen and the improve- 
ments they had made. In law they were trespassers; in fact they were honest 
farmers." 21 The result was the formation of "extra-legal" organizations for 
protection and justice. These land clubs or claims associations, as the extra- 
legal associations came to be known, were found throughout the Middle 
West with the Iowa variety receiving the most attention. Benjamin F. 
Shambaugh suggests that we view these clubs "as an illustrative type of 
frontier extra-legal, extra-constitutional political organization in which are 
reflected certain principles of American life and character." 22 To Frederick 
Jackson Turner these squatters' associations provided an excellent example 
of the "power of the newly arrived pioneers to join together for a common 
end without the intervention of governmental institutions. . . ." 23 

Each claims association adopted its own constitution and by-laws, elected 
officers for the operation of the organization, established rules for adjudicat- 
ing disputes, and established the procedure for the registration and protec- 
tion of claims. The constitution of the Claim Association of Johnson 
County, Iowa offers one of the few records of club operation. In addition to 
president, vice president, and clerk and record, that constitution provided 
for the election of seven judges, any five of whom could compose a court to 
settle disputes, and for the election of two marshals charged with enforcing 
rules of the association. The constitution specified the procedure whereby 
property rights in land would be defined as well as the procedure for 
arbitrating claims disputes. User charges were utilized for defraying arbitra- 
tion expenses. 

In such case of the place and time of holding such court and summons all 
witnesses that either of the parties may require the court made previous 


to their proceeding to investigate any case require the plaintiff and 
defendant to deposit a sufficient sum of money in their hands to defray 
the expenses of said suit or the costs of said suit, and should either party 
refuse to deposit such sum of money the court may render judgment 
against such person refusing to do. . . . 7i 

As a sanction against those who would not follow the rules of the 
association, violence was an option, but the following resolution suggests 
that less violent means were also used. 

Resolved, that more effectually to sustain settlers in their just claims 
according to the custom of the neighborhood and to prevent difficulty 
and discord in society that we mutually pledge our honours to observe 
the following resolutions rigidly. That we will not associate nor counte- 
nance those who do not respect the claims of settlers and further that we 
will neither neighbor with them . . . Trade barter deal with them in any 
way whatever. . . , 25 

That the constitutions, by-laws, and resolutions of all claims clubs were 
not alike suggests that preferences among the squatters did vary and that 
there were alternative forms of protection and justice available. The most 
common justification for the clubs was stated as follows: "Whereas it has 
become a custom in the western states, as soon as the Indian title to the 
public lands has been extinguished by the General Government for the 
citizens of the United States to settle upon and improve said lands, and 
heretofore the improvement and claim of the settler to the extent of 320 
acres, has been respected by both the citizens and laws of Iowa. . . ." 26 Other 
justification "emphasized the need of protection against 'reckless claim 
jumpers and invidious wolves in human form,' or the need 'for better 
security against foreign as well as domestic aggression.'" 27 Some associations 
were formed specifically for the purpose of opposing "speculators" who were 
attempting to obtain title to the land. The constitutions of these clubs as 
evidenced by the Johnson County document specifically regulated the 
amount of improvements which had to be made on the claim. Other associa- 
tions, however, encouraged speculation by making no such requirements. 
These voluntary, extra-legal associations provided protection and justice 
without apparent violence and developed rules consistent with the prefer- 
ences, goals, and endowments of the participants. 

b. Cattlemens' Associations: 

Early settlement of the cattle frontier created few property conflicts, but as 
land became more scarce, private, voluntary enforcement mechanisms 
evolved. Initially "there was room enough for all, and when a cattleman rode 
up some likely valley or across some well-grazed divide and found cattle 
thereon, he looked elsewhere for range." 28 But even "as early as 1868, two 


years after the first drive, small groups of owners were organizing themselves 
into protective associations and hiring stock detectives." 29 The place of these 
associations in the formation of "frontier law" is described by Louis Pelzer. 

From successive frontiers of our American history have developed 
needed customs, laws, and organizations. The era of fur-trading pro- 
duced its hunters, its barter, and the great fur companies; on the mining 
frontier came the staked claims and the vigilance committees; the camp 
meeting and the circuit rider were heard on the religious outposts; on the 
margins of settlement the claim clubs protected the rights of the squatter 
farmers; on the ranchmen's frontier the millions of cattle, the vast 
ranges, the ranches, and the cattle companies produced pools and local, 
district, territorial and national cattle associations. 30 

As Ernest Staples Osgood tells us, it was "the failure of the police power in 
the frontier communities to protect property and preserve order," which 
"resulted over and over again in groups who represented the will of the law- 
abiding part of the community dealing out summary justice to offenders." 31 
Like the claims associations, the cattlemen's associations drew up formal 
rules governing the group, but their means of enforcing private rights was 
often more violent than the trade sanctions specified by the claims associa- 
tions. These private protection agencies were quite clearly a market response 
to existing demands for enforcement of rights. 

Expert gunmen — professional kilters — had an economic place in the 
frontier West. They turned up wherever there was trouble . . . Like all 
mercenaries, they espoused the side which made them the first or best 
offer. . . .32 

Just why, when, and how he hooked up with the cattlemen around Fort 
Maginnis, instead of with the rustlers, is a trifle obscure, but Bill became 
Montana's first stock detective. Raconteurs of the period seem agreed 
that Bill's choice was not dictated by ethics, but by the prospect of 
compensation. At any rate, he became a hired defender of property 
rights, and he executed his assignments — as well as his quarry — with 
thoroughness and dispatch. 33 

The market-based enforcement agencies of the cattlemen's frontier were 
different from modern private enforcement firms in that the earlier versions 
evidently enforced their own laws much of the time rather than serving as 
simply an extension of the government's police force. An often expressed 
concern about this type of enforcement is that 1) the enforcement will be 
ineffective or 2) the enforcement agencies will themselves become large-scale 
organizations that use their power to infringe upon individual rights. We 
have argued above that there is little reason to believe that the first concern is 

It also appears that the second concern is not supported by the experience 
of the American West. Major economies of scale did not seem to exist in 


either enforcement or crime. Although there are numerous records of 
gunslingers making themselves available for hire, we find no record of these 
gunslingers discovering that it was even more profitable to band together 
and form a super-defense agency that sold protection and rode roughshod 
over private property rights. Some of the individuals did drift in and out of a 
life of crime and sometimes did form loose criminal associations. However, 
these associations did not seem to be encouraged by the market form of 
peace keeping, and in fact, seemed to be dealt with more quickly and more 
severely under private property protective associations than under govern- 
ment organization. 

There were a few large private enforcement organizations, in particular 
the Pinkerton Agency and Wells Fargo, but these agencies seemed to serve 
mainly as adjuncts to government and were largely used in enforcing state 
and national laws. Other large-scale associations, e.g., the Rocky Mountain 
Detective Association and the Anti-Horse Thief Association, were loose 
information providing and coordination services, and rarely provided on- 
the-spot enforcement of private rules. 34 

c. Mining Camps: 

As the population of the U.S. grew, westward expansion was inevitable, 
but there can be little doubt that the discovery of gold in California in 1848 
rapidly increased the rate of expansion. Thousands of Easterners rushed to 
the most westward frontier in search of the precious metal, leaving behind 
their civilized world. Later the same experience occurred in Colorado, 
Montana, and Idaho and, in each case, the first to arrive were forced into a 
situation where they had to write the rules of the game. 

There was no constitutional authority in the country, and neither judge 
nor officer within five hundred miles. The invaders were remitted to the 
primal law of nature, with, perhaps, the inherent rights of American 
citizenship. Every gulch was filling with red-hot treasure hunters; every 
bar was pock-marked with "prospect holes"; timber, water-rights, and 
town-lots were soon to be valuable, and government was an imperative 
necessity. Here was a fine field for theorists to test their views as to the 
origin of civil law. 35 

The early civil law which evolved from this process approximated anarcho- 
capitalism as closely as any other experience in the U.S. 

In the absence of a formal structure for the definition and enforcement of 
individual rights, many of the groups of associates who came seeking their 
fortunes organized and made their rules for operation before they left their 
homes. Much the same as company charters today, these voluntary con- 
tracts entered into by the miners specified financing for the operation as well 
as the nature of the relationship between individuals. These rules applied 


only to the miners in the company and did not recognize any outside 
arbitrator of disputes; they did not "recognize any higher court than the law 
of the majority of the company." 36 

As Friedman's theory predicts, the rules under which the companies were 
organized varied according to tastes and needs of the company. "When we 
compare the rules of different companies organized to go to the mines, we 
find considerable variation." 37 In addition to the rules listed above, company 
constitutions often specified arrangements for payments to be used for 
caring for the sick and unfortunate, rules for personal conduct including the 
use of alcoholic spirits, and fines which could be imposed for misconduct, to 
mention a few. 3K In the truest nature of the social contract, the governing 
rules of the company were negotiated, and as in al! market transactions 
unanimity prevailed. Those who wished to purchase other "bundles of 
goods" or other sets of rules had that alternative. 

Once the mining companies arrived at the potential gold sites, the rules 
were useful only insofar as questions of rights involved members of the 
company; when other individuals were confronted in the mining camps, 
additional negotiation was necessary. Of course, the first issues to arise 
concerned the ownership of mining claims. When the groups were small and 
homogeneous, dividing up the gulch was an easy task. But when the num- 
bers moving to the gold country reached the thousands, the problems 
increased. The general solution was to hold a mass meeting and appoint 
committees assigned to drafting the laws. Gregory Gulch in Colorado 
provides an example. 

A mass meeting of miners was held June 8, 1859, and a committee 
appointed to draft a code of laws. This committee laid out boundaries 
for the district, and their civil code, after some discussion and amend- 
ment, was unanimously adopted in mass meeting, July 16, 1859. The 
example was rapidly followed in other districts, and the whole Territory 
was soon divided between a score of local sovereignties. 39 

The camps could not live in complete isolation from the established forms 
of government, but there is evidence that they were able to maintain their 
autonomy. In California, military posts were established to take care of 
Indian troubles, but these governmental enforcement organizations did not 
exercise any authority over the mining camps. General Riley in an 1849 visit 
to a California camp told the miners that "all questions touching the 
temporary right of individuals to work in particular localities of which they 
were in possession, should be left to the decision of the local authorities." 40 

No alcalde, no council, no justice of the peace, was ever forced upon a 
district by an outside power. The district was the unit of political 
organization, in many regions, long after the creation of the state; and 
delegates from adjoining districts often met in consultation regarding 


boundaries, or matters of local government, and reported to their 
respective constituencies in open-air meeting, on hillside or river-bank. 41 

Moreover, the services of trained lawyers were not welcomed in many of 
the campus and even forbidden in districts such as the Union Mining 

Resolved, that no lawyer be permitted to practice law in this district, 
under penalty of not more than fifty nor less than twenty lashes, and be 
forever banished from this district. 42 

In this way, the local camps were able to agree upon rules or individual 
rights and upon methods for enforcement thereof without coercion from 
U.S. authorities. When outside laws were imposed upon the camps, there is 
some evidence that they increased rather than decreased crime. One early 
Californian writes, "We needed no law until the lawyers came," and another 
adds, "There were few crimes until the courts with their delays and technical- 
ities took the place of miners' law." 43 

While the mining camps did not have private courts where individuals 
could take their disputes and pay for arbitration, they did develop a system 
of justice through the miners' courts. These courts seldom had permanent 
officers, although there were instances of justices of the peace. The folk-moot 
system was common in California. By this method a group of citizens was 
summoned to try a case. From their midst they would elect a presiding 
officer or judge and select six or twelve persons to serve as the jury. Most 
often their rulings were not disputed, but there was recourse when disputes 
arose. For example, in one case involving two partners, after a ruling by the 
miners' court, the losing partner called a mass meeting of the camp to plead 
his case and the decision was reversed. 44 And if a larger group of miners was 
dissatisfied with the general rulings regarding camp boundaries or individual 
claim disputes, notices were posted in several places calling meeting of those 
wishing a division of the territory. "If a majority favored such action, the 
district was set apart and named. The old district was not consulted on the 
subject, but received a verbal notice of the new organization. Local condi- 
tions, making different regulations regarding claims desirable, were the chief 
causes of such separations." 45 "The work of mining, and its environment and 
conditions, were so different in different places, that the laws and customs of 
the miners had to vary even in adjoining districts." 46 

When disputes did arise and court sessions were called, any man in the 
camp might be called upon to be the executive officer. Furthermore, any one 
who was a law-abiding citizen might be considered for prosecutor or defend- 
er for the accused. 

In Colorado there is some evidence of competition among the courts for 
business, and hence, an added guarantee that justice prevailed. 


The civil courts promptly assumed criminal jurisdiction, and the year 
1860 opened with four governments in full blast. The miners' courts, 
people's courts, and "provisional government" (a new name for "Jeffer- 
son") divided jurisdiction in the mountains; while Kansas and the 
provisional government ran concurrent in Denver and the valley. Such 
as felt friendly to either jurisdiction patronized it with their business. 
Appeals were taken from one to the other, papers certified up or down 
and over, and recognized, criminals delivered and judgments accepted 
from one court by another, with a happy informality which it is pleasant 
to read of. And here we are confronted by an awkward fact: there was 
undoubtedly much less crime in the two years this arrangement lasted 
than in the two which followed the territorial organization and regular 
government. 47 

This evidence is consistent with Friedman's hypothesis that when competi- 
tion exists, courts will be responsible for mistakes and the desire for repeat 
business will serve as an effective check on "unjust" decisions. 

d. Wagon Trains: 

Perhaps the best example of private property anarchism in the American 
West was the organization of the wagon trains as they moved across the 
plains in search of California gold. The region west of Missouri and Iowa 
was unorganized, unpatrolled, and beyond the jurisdiction of the United 
States law. But to use the old trapper saying that there was "no law west of 
Leavenworth" to describe the trains would be inappropriate. "Realizing that 
they were passing beyond the pale of the law, and aware that the tedious 
journey and the constant tensions of the trail brought out the worst in 
human character, the pioneers . . . created their own law making and law- 
enforcing machinery before they started." 48 Like their fellow travelers on the 
ocean, the pioneers in their prairie schooners negotiated a "plains law" much 
like their counterparts' "sea law." 49 The result of this negotiation in many 
cases was the adoption of a formal constitution patterned after that of the 
U.S. The preamble of the constitution of the Green and Jersey County 
Company provides an example. 

We, the members of the Green and Jersey County Company of Emi- 
grants to California, for the purpose of effectually protecting our per- 
sons and property, and as the best means of ensuring an expeditious and 
easy journey do ordain and establish the following constitution. 50 

From this and the other constitutions which have survived it is clear that 
these moving communities did have a basic set of rules defining how "the 
game would be played" during their journey. Like the rules of the mining 
camps, the wagon train constitutions varied according to the tastes and 
needs of each organization, but several general tendencies do emerge. Most 


often the groups waited until after they have been on the trail for a few days 
and out of the jurisdiction of the United States. One of the first tasks was to 
select officers who would be responsible for enforcing the rules. For the 
Green and Jersey County Company, which was not atypical, the officers 
included a Captain, Assistant Captain, Treasurer, Secretary, and an Officer 
of the Guard. The constitutions also included eligibility for voting and 
decision rules for amendment, banishment of individuals from the group, 
and dissolution of the company. Duties for each officer were often well 
specified as in the case of the Charleston, Virginia, Mining Company. 51 In 
addition to these general rules, specific laws were enacted. Again, the 
introduction of the Green and Jersey County Company is illustrative. 

We, citizens and inhabitants of the United States, and members of the 
Green and Jersey County Company of Emigrants to California; about 
starting on a journey through a territory where the laws of our common 
country do not extend their protection, deem it necessary, for the 
preservation of our rights, to establish certain wholesome rules and 
regulations. We, therefore, having first organized a constitution of 
government, for ourselves, do now proceed to enact and ordain the 
following laws; and in so doing we disclaim all desire or intention of 
violating or treating with disrespect, the laws of our country. 52 

The specific rules included organization of jury trials; regulation of Sabbath- 
breaking, gambling and intoxication; and penalties for failing to perform 
chores, especially guard duty. In certain cases there were even provisions for 
the repair of road, building bridges, and protection of other "public 

It has been argued that "these ordinances or constitutions . . . may be of 
interest as guides to pioneers' philosophies about law and social organiza- 
tion, [but] they do not help answer the more essential question of how, in 
fact, not in theory, did the overland pioneer face problems of social disorder, 
crime, and private conflict." 54 Nonetheless, it is clear that the travelers did 
negotiate from Schelling points to social contracts without relying upon the 
coercive powers of government. And these voluntary contracts did provide 
the basis for social organization. 

The Schelling points from which the individuals negotiated included a 
very well accepted set of private rights especially with regard to property. 
One might expect that upon leaving the legal jurisdiction of the U.S. with its 
many laws governing private property that the immigrants would have less 
respect for other's rights. Moreover, since the constitutions and by-laws 
seldom specifically mentioned individual property rights, we might infer that 
these were of little concern to the overlanders. In his article, "Paying for the 
Elephant: Property Rights and Civil Order on the Overland Trail," John 
Phillip Reid convincingly argues that respect for property rights was para- 
mount. Even when food became so scarce that starvation was a distinct 
possibility, there are few examples where the pioneers resorted to violence. 


Indeed, it is no exaggeration to say that the emigrants who traveled 
America's overland trail gave little thought to solving their problems by 
violence or theft. We know that some ate the flesh of dead oxen or beef 
with maggots while surrounded by healthy animals they could have shot. 
Those who suffered losses early in the trip and were able to go back, did 
so. The disappointment and embarrassment for some must have been 
extremely bitter, but hundreds returned. They did not use weapons to 
force their way through. While a few of those who were destitute may 
have employed tricks to obtain food, most begged, and those who were 
"too proud to beg" got along the best they could or employed someone 
to beg for them. If they could not beg, they borrowed, and when they 
could not borrow they depended on their credit. 55 

The emigrants were property minded. The fact that the constitution con- 
tained few references to individual property rights may well reflect the 
significance of private property Schelling points. 

When crimes against property or person did occur, the judicial system 
which was specified in the contracts was brought into play. "The rules of a 
traveling company organized at Kanesvilie, Iowa, provided: 'Resolved, that 
in case of any dispute arising between any members of the Company, they 
shall be referred to three arbiters, one chosen by each party, and one by the 
two chosen, whose decision shall be final.'" 56 The methods of settling 
disputes varied among the companies, but in nearly all cases some means of 
arbitration were specified to insure "that the rights of each emigrant are 
protected and enforced." 57 

In addition to the definition and enforcement of individual rights, the 
overlanders also were faced with the question of how to solve disputes 
involving contractual relations for business purposes. For all of the same 
reasons that firms exist for the production of goods and services, individuals 
crossing the plains had incentives to organize into "firms" with one another. 
Scale economies in the production of goods such as meals and services such 
as herding and in the provision of protection from Indians provided for 
gains from voluntary and collective action. Again markets seemed to func- 
tion well in providing several types of contractual arrangements for this 
production and protection. 

A common form of organization on the overland trail was the "mess." 
Similar to share-cropping arrangements in agriculture, the mess allowed 
individuals to contribute inputs such as food, oxen, wagons, labor, etc. for 
the joint production of travel or meals. In this way, the mess, which allowed 
the property to remain privately owned, differed from the partnership where 
property was concurrently owned. Since mess property was available for use 
by all members of the mess, the "potential for conflict was great. When the 
conflicts occurred, renegotiation of the contract was sometimes necessary. 
When new agreements could not be reached, the mess would have to be 
dissolved and property returned to individual owners. Since ownership 
remained private, division was not difficult. Moreover, since there were gains 


from trade to be obtained from combining inputs, it was usually possible to 
renegotiate when violations in the contract occurred. There were, however, 
cases where renegotiation seemed impossible, as in the following example of 
a mess which found one of its members unwilling to do his share of the 

[W]e concluded the best thing we could do was to buy him out and let 
him go which accordingly we did by paying him one hundred doll[ar]s. 
He shoulderfed] his gun, carpet bag, and blanket and took the track to 
the prairie without saying good by to one of us. 58 

While other cases of dissolution of messes occurred, there is no evidence that 
coercive power was used to take property from rightful owners. If an indivi- 
dual left one mess he could usually join another. 

The other common type of organization on the overland routes was the 
joint stock company. In this organization members contributed capital and 
other property which was held concurrently. The Charlestown, Virginia, 
Mining Company provides an example of such a company and its constitu^ 
tion attests to the establishment of rules governing use of concurrent prop- 
erty. 59 Again it should be emphasized that these rules were voluntary 
though coercion was used within the organization to enforce them. 

Like the mess, when disagreements occurred within the joint stock com- 
pany, renegotiation was necessary. However, since the property was held 
concurrently this process was more complicated. In the first place, an 
individual could not simply leave the company. Most often withdrawal 
could only occur with the consent of a percentage of other members. But 
even then withdrawal was complicated by the need to divide the property. In 
at least one case this problem was solved by dividing all of the property and 
reorganizing into messes. 

When the original joint stock company of sixty men dissolved, there was 
no mention of individual ownership. The property was parcelled by 
assigning it to traveling units already in existence. However, in executing 
the second division, the smaller group found it possible — perhaps even 
necessary — to utilize the concept of personal property. In order to 
accomplish their purpose, the men first transmuted the common stock 
from "company" or partnership property into private property. Then, by 
negotiating contracts, goods they briefly had held as individuals, were 
converted back into partnership or mess property. 60 

All of this occurred in the absence of coercion. 

Perhaps an even more revealing example of anarcho-capitalism at work is 
found in the dissolution of the Boone County Company. When the eight 
members of the company fell into rival factions of 3 and 5, dissolution 
became imminent. Negotiations continued for some time until all the com- 
pany property (note that none of the private property was divided) was 


divided between the two groups. When negotiations appeared at an impasse 
because of the indivisibility of units and differences in quality, prices were 
assigned to units and the groups resolved the issue by trade. However, a S75 
claim of the majority group proved even harder to resolve. The claim 
resulted from the fact that a passenger who owned two mules and a horse 
and who had been traveling with the company chose to take his property and 
go with the minority. The disadvantaged majority demanded compensation. 
Unable to settle the dispute, arbitration came from a "private court" consist- 
ing of "3 disinterested men," one chosen by each side and a third chosen by 
the two. Their decision follows. 

[W]e can see no just cause why the mess of 3 men should pay anything to 
the mess of 5 men. It being ... a mutual and sumultaneous agreement to 
dissolve the original contract. The fact that Abbott joins in with the 3 
men does not alter in our opinion the matter of the case — for the 
dessolution being mutually agreed upon, all the parties stand in the same 
relation to each other which they did, before any contract was entered 
into. And Abbott might or not just as he chose unite with either party. If 
he chose to unite with neither party, then clearly neither could claim of 
the other. If he united with a foreign party then who could think of 
claiming anything of such a party. 61 

The important point of this example is that when the Boone County 
Company could not renegotiate its initial contract the members did not 
resort to force, but chose private arbitration instead. The many companies 
which crossed the plains "were experiments in democracy and while some 
proved inadequate to meet all emergencies, the very ease with which the 
members could dissolve their bonds and form new associations without 
lawlessness and disorder proves the true democratic spirit among the Ameri- 
can frontiersmen rather than the opposite." 62 Competition rather than 
coercion insured justice. 

While the above evidence suggests that the wagon trains were guided by 
anarcho-capitalism, it should be noted that their unique characteristics may 
have contributed to the efficacy of the system. First, the demand for public 
goods was probably not as great as found in more permanent communities. 
If nothing else, the transient nature of these moving communities meant that 
schools, roads, and other goods which are publicly provided in our society 
were not needed, hence there was no demand for a government to form for 
this purpose. Secondly, the short term nature of the organization meant that 
there was not a very long time for groups to organize to use coercion. These 
were "governments" of necessity rather than ambition. Nonetheless, the 
wagon trains on the overland trails did provide protection and justice 
without a monopoly on coercion, did allow competition to produce rules, 
and did not result in the lawless, disorder generally associated with anarchy. 


Concluding Remarks 

From the above descriptions of the experience of the American West, several 
conclusions consistent with Friedman's hypotheses appear. 

1) The West, although often dependent upon market peace keeping 
agencies, was, for the most part, orderly. 

2) Different standards of justice did prevail and various preferences for 
rules were expressed through the market place. 

3) Competition in defending and adjudicating rights does have benefi- 
cial effects. Market agencies provided useful ways of measuring the 
efficiency of government alternatives. The fact that government's mo- 
nopoly on coercion was not taken as seriously as at present meant that 
when that monopoly was poorly used market alternatives arose. Even 
when these market alternatives did become "governments" in the sense 
of having a virtual monopoly on coercion, the fact that such firms were 
usually quite small provided significant checks on their behavior. Clients 
could leave or originate protective agencies on their own. Without 
formal legal sanctions, the private agencies did face a "market test" and 
the rate of survival of such agencies was much less than under govern- 

The above evidence points to the overall conclusion that competition was 
very effective in solving the "public goods" problem of law and order in the 
American West. However, this does not mean that there were no disputes 
that would cause one to doubt the efficacy of such arrangements. Two 
examples of civil disorder are often mentioned in Western history and they 
must be dealt with. 

The first is the very bitter feud between the Regulators and the Modera- 
tors in the Republic of Texas in the 1 840 s.* 3 What started as a disagreement 
between two individuals in Shelby County escalated until it involved a 
significant number of people in a large area of east Texas. In 1839 a loosely 
organized band, later to be known as the Moderators, was issuing bogus 
land papers, stealing horses, murdering, and generally breaking the "law" of 
Shelby County, Texas. To counter this lawlessness a vigilance committee 
was formed under the name of Regulators. Unfortunately, "bad elements 
soon infiltrated the Regulators, and their excesses in crime later rivaled those 
of the Moderators. The situation evolved into a complexity of personal and 
family feuds, and complete anarchy existed until 1844." 64 One citizen de- 
scribed the situation in a letter to a friend: 

Civil war, with all its horror, has been raging in this community. The 
citizens of the county are about equally divided into two parties, the 
Regulators and Moderators. It is no uncommon sight to see brothers 
opposed to each other. Every man's interest in this county is seriously 
affected. 65 


During the period eighteen men were murdered and many more wounded. 
Only when President Sam Houston called out the militia in 1844 did the 
feuding stop. Thus, for whatever reasons, in this case it appears that depen- 
dence upon non-governmental forms of organization was not successful. 

Another major civil disruption that should be considered is the Johnson 
County War in Northern Wyoming in 1892. A group of stockgrowers and 
their hired guns entered Johnson County with the express purpose of wiping 
out the rustlers they believed to be prevalent there. The citizens of the 
county, feeling they were being invaded by a foreign army, responded en 
masse and for a short period of time a "war" did result. However, in this 
case the disorder seems to have been more a battle between two "legitimized" 
agencies of coercion, the state and the local government, than between 
strictly private enforcement agencies. The invaders, while ostensibly acting 
as a private party, had the tacit approval of the state government and used 
that approval to thwart several attempts by the local authorities to secure 
state or federal intervention. Those who responded to the invasion were 
under the leadership of the Johnson County sheriff and felt very much that 
they were acting appropriately under the existing laws of that time. 66 Thus 
this incident sheds little light on the efficacy of market arrangements for 
maintaining order. 

In conclusion, it appears in the absence of formal government, that the 
western frontier was not as wild as legend would have us believe. The market 
did provide protection and arbitration agencies that functioned very effec- 
tively, either as a complete replacement for formal government or as a 
supplement to that government. However, the same desire for power that 
creates problems in government also seemed to create difficulties at times in 
the West. All was not peaceful. Especially when Schelling points were 
lacking, disorder and chaos resulted, lending support to Buchanan's conten- 
tion that agreement on initial rights is important to anarcho-capitalism. 
When this agreement existed, however, we have presented evidence that 
anarcho-capitalism was viable on the frontier. 


1. James M. Buchanan, "Before Public Choice," in G. Tullock, ed. s Explorations in the 
Theory of Anarchy (Blacksburg, Va.: Center for the Study of Public Choice, 1972), p. 37. 

2. James M. Buchanan, "Review of David Friedman, The Machinery of Freedom: Guide to 
Radical Capitalism," The Journal of Economic Literature, Vol. XII, No. 3 (1974), p. 915. 

3. E.A.J. Johnson, The Foundations of American Economic Freedom (Minneapolis: Univer- 
sity of Minnesota Press, 1973), p. 305, 

4. Laurence S. Moss, "Private Property Anarchism: An American Variant," in G. Tullock, 
ed., Further Explorations in the Theory of Anarchy (Blacksburg, Va.: Center for the Study 
of Public Choice, 1974), p. 26. 

5. James M. Buchanan, Freedom in Constitutional Contract (College Sta., Tex.: Texas A&M 
University Press, 1977), p. 52. 


6. Buchanan, "Review of Machinery of Freedom," p. 915. 

7. Ibid., emphasis added. 

8. Ibid. 

9. For a longer discussion of Schelling points, see Thomas C. Schelling, The Strategy of 
Conflict (Cambridge: Harvard University Press, I960), pp. 54-58; Buchanan, "Review of 
Machinery of Freedom," p. 914; and David Friedman, "Schelling Points, Self- Enforcing 
Contracts, and the Paradox of Order," (unpub. Ms., Center for the Study of Public Choice, 
Virginia Polytechnic Institute). 

10. David Friedman, The Machinery of Freedom: Guide to Radical Capitalism (New York: 
Harper & Row, 1973), p. 152. 

11. Gilbert Geis, "Violence in American Society," Current History, Vol. L1I (1976), p. 357. 

12. Eugene W. Hollon, Frontier Violence: Another Look (New York: Oxford University Press, 
1974), p. x. 

13. Robert A. Dykstra, The Cattle Towns (New York: Alfred A. Knopf, 1968), p. 144. 

14. Paul 1. Wellman, The Trampling Herd (New York: Carrick and Evans, 1939), p. 159. 

15. Hollon, Frontier Violence, p. 200. 

16. Frank Prassel, The Western Peace Officer (Norman, Okla.: University of Oklahoma Press, 
1937), pp. 16-17. 

17. Prassel, Western Peace Officer, p. 7. 

1 8. See George R. Stewart, Committee on Vigilance (Boston: Houghton Mifflin Co., 1964); and 
Alan Valentine, Vigilante Justice (New York: Reynal and Co., 1956). 

19. Thomas J. Dimsdale, The Vigilantes of Montana (Norman, Okla.: University of Oklahoma 
Press, 1953). 

20. Wayne Gard, Frontier Justice (Norman, Okla.: University of Oklahoma Press, 1949), p. 

21. Benjamin F. Shambaugh, "Frontier Land Clubs, or Claim Associations," Annual Report of 
the American Historical Association (1900), p. 71. 

22. Shambaugh, "Frontier Land Clubs," p. 69. 

23. Frederick Jackson Turner, The Frontier in American History (New York: Henry Holt and 
Co., 1920), p. 343. 

24. Shambaugh, "Frontier Land Clubs," p. 77. 

25. Ibid., pp. 77-78. 

26. Quoted in Allan Bogue, "The Iowa Claim Clubs: Symbol and Substance," in V. Carstensen, 
ed., The Public Lands (Madison, Wise: University of Wisconsin Press, 1963), p. 50. 

27. Ibid. 

28. Ernest Staples Osgood, The Day of the Cattleman (Minneapolis: University of Minnesota 
Press, 1929), p. 182. 

29. Ibid., p. 118. 

30. Louis Pelzer, The Cattlemen's Frontier (Glendale, Calif.: A.H. Clark, 1936), p. 87. 

31. Osgood, Day of Cattleman, p. 157. 

32. Wellman, Trampling Herd, p. 346. 

33. Robert H, Fletcher, Free Grass to Fences: the Montana Cattle Range Story (New York: 
University Publishers, 1960), p. 65. 

34. Prassel, Western Peace Officer, pp. 134-141. 

35. J.H. Beadle, Western Wilds and the Men Who Redeem Them (Cincinatti: Jones Brothers, 
1882), p. 476. 

36. Charles Howard Shinn, Mining Camps: A Study in American Frontier Government (New 
York; Alfred A. Knopf, 1948), p. 107. 

37. Ibid. 

38. John Phillip Reid, "Prosecuting the Elephant: Trials and Judicial Behavior on the Overland 
- Trail," BYU Law Review, Vol. 77, No. 2 (1977), pp. 335-336. 

39. Beadle, Western Wilds, p. 477, emphasis added. 

40. Quoted in Shinn, Mining Camps, p. 111. 

41. Shinn, Mining Camps, p. 168. 

42. Quoted in Beadle, Western Wilds, p. 478. 

43. Quoted in Shinn, Mining Camps, p. 113. 


44. Marvin Lewis, ed., The Mining Frontier (Norman, Okla.: University of Oklahoma Press, 
1967). pp. 10-18. 

45. Shinn, Mining Camps, p. 118. 

46. Ibid., p. 159. 

47. Beadle, Western Wilds, p. 477. 

48. Ray Allen Billington, The Far Western Frontier, 1830-1860 (New York: Harper & Bros., 
1956), p. 99. 

49. David Morris Potter, ed., Trail to California (New Haven: Yale University Press, 1945), pp. 

50. Reprinted in Elizabeth Page, Wagon West (New York: Farrar & Rinehart, 1930), Appendix 

51. Constitution reprinted in Potter, Trail to California, Appendix A. 

52. Page, Wagon West, p. 118. 

53. Ibid., p. 119. 

54. David J. Langum, "Pioneer .Justice on the Overland Trail," Western Historical Quarterly, 
Vol. 5, No. 3 (1974), p. 424, fn. 12. 

55. John Phillip Reid, "Paying for the Elephant: Property Rights and Civil Order on the 
Overland Trail," The Huntington Library Quarterly, Vol. XLI, No. 1 (1977), pp. 50-51. 

56. Reid, "Prosecuting the Elephant," p. 330. 

57. Quoted in Reid, "Prosecuting trie Elephant," p. ,330. 

58. Quoted in John Phillip Reid, "Dividing the Elephant: the Separation of Mess and Joint 
Stock Property on the Overland Trail," Hastings Law Journal, Vol. 28, No. 1 (1976), p. 77. 

59. See Potter, Trail to California, Appendix A. 

60. Reid, "Dividing the Elephant," p. 79. 

61. Quoted in Reid, "Dividing the Elephant," p. 85. 

62. Owen Cochran Coy, The Great Trek (San Francisco: Powell Pub. Co., 1931), p. 117. 

63. See Gard, Frontier Justice; Hollon, Frontier Violence; and Hugh David Graham and Ted 
Robert Gurr, eds., The History of Violence in America: Historical and Comparative 
Perspectives (New York: Prager, 1969). 

64. Hollon, Frontier Violence, p. 53. 

65. Quoted in Gard, Frontier Justice, pp. 35-36. 

66. See Helen Huntington Smith, The War on the Powder River: the History of an Insurrection 
(Lincoln, Neb.: University of Nebraska Press, 1966).